Energy Prospectus

Canada LNG May Necessitate Large Drilling Growth -- Market Talk 04/16 07:50 AM

--------------------------------------------------------------------------------

8:50 EDT - Morgan Stanley sees potentially big benefits for companies exposed to LNG in Canada as that country is poised to export large amounts of the commodity. Saying 100 new rigs could be needed, the investment bank thinks Precision Drilling (PDS:$11.78,00$-0.05,00-0.42%) may "double its Canadian land-drilling business over several years" while service providers Calfrac (CFW.T) and Trican (TCW.T) could see big growth for pressure pumpers. So Morgan Stanley does a 180 on PDS, going from underweight to overweight while nearly doubling its price target to $16, while upgrading CFW.T to equal weight and moving its target to C$39 from C$31. They closed Tuesday at $11.78 and C$34.83, respectively and have logged double- digit gains this year. (kevin.kingsbury@wsj.com; @kevinkingsbury)

PDS is a first class outfit. I will add it to the list for a profile in May. PDS is much more than a driller. Check out their website.

COVERAGE REITERATED: Patterson-UTI (PTEN) reiterated by Barclays. Reiterated rating Overweight. PT raised from $30>34 04/16 11:34 AM

If natural gas price go where I think they are going, it is going to be a heck of a year for the onshore drillers.